Hiroshima Mitsukoshi’s aggressive stance is remarkable. Although the current era is one of distress and difficulty for local department stores, the spirit of these small players with retail spaces of just 16,000m2 is poised to ‘rip up the rule book of the department stores’. Compared to the Tokyo metropolitan area, other regions of Japan are facing a slow recovery in terms of consumption, and have low expectations for inbound demand (particularly that of foreign visitors). Furthermore, leading apparel manufacturers are closing or reducing the area of their retail spaces in response to the slump in business, and local department stores are bearing the brunt of the backlash. As these local stores battle to survive, many are struggling with the search for new ways to get by. Hiroshima Mitsukoshi, however, has continued to boldly challenge the status quo.
Words by Sakiko Kanatani
New projects on a weekly basis
Hiroshima Mitsukoshi’s thorough renovations, ongoing since 1997, have laid the foundations for the store as it stands today. In the past, the heart of Hiroshima City was a crowded retail battleground, hosting seven department stores operated by four companies. In an attempt to seek out innovative business strategies, Hiroshima Mitsukoshi travelled widely across Japan. However, what it learnt was the sad reality for department stores — small stores cannot win against their larger counterparts.
President Hirofumi Matsui says: “If we were to do the same things as the large stores, we would only be buried. We had to do something unique to us alone.” To that end, the company extended its antenna into different industries.
Methods for ‘ripping up the rule book’ can be found throughout Hiroshima Mitsukoshi’s retail spaces. Normally a few leading national brands (NB) account for the majority of retail space at local department stores. Rather than focusing on the scale of the company, however, Hiroshima Mitsukoshi has placed emphasis on sharing the enthusiasm and passion of storeowners. In doing so, it became the first department store to attract brands such as FOXEY and Ponte Vecchio (currently closed).
While typically highly profitable fashion and accessory items are placed on the ground floors of department stores, Hiroshima Mitsukoshi has prominently positioned the wine-seller ENOTECA at its entrance. Instead of purely targeting the pursuit of profits, Hiroshima Mitsukoshi uses the sale of wine to convey the message it welcomes a mature clientele. Rather than designing its retail space according to department or product category, the store has been an early adopter of the ‘lifestyle editing’ concept.
The greatest strength of Hiroshima Mitsukoshi lies in its event spaces, found in 28 locations. A dedicated full-time team comprised of eight people travels across Japan developing new projects on a weekly basis. While it is now common to operate event spaces for limited periods, Hiroshima Mitsukoshi adopted this format in the early 2000s and has since hosted events boasting sales second only to those of the Nihonbashi head store in Tokyo.
An investment of 800 million yen
Hiroshima Mitsukoshi has now taken up a new challenge. In March of 2016, the store’s basement-level foods section will undergo major renovations for the first time in 16 years. Based on the success of this renovation, Hiroshima Mitsukoshi will also rebuild its women’s apparel floor. The store has invested an initial 800 million yen in renovations, and is currently planning the creation of a new form of retail space, marking a fresh departure from the conventional basement floors of most department stores. Hiroshima Mitsukoshi aims to increase revenue by 1 billion yen in the first year following its completion.
The large-scale renovations that have been ongoing since 1997 achieved the remarkable result of having placed the store among the top 20 department stores nationwide by monthly sales per square metre, encouraging the company to continue investing in its improvement. The conviction to win by any means has prompted a sense of urgency and has given birth to increasingly innovative sales strategies.